By Jenny Hsu and Chester Yung

Hong Kong’s Next Media Ltd. shares soared by as much as 51.8% on Thursday morning after the media conglomerate said Wednesday it has virtually exited the Taiwan market by selling its print and television operations there, after less than 10 years of operation on the island.

The deal, which supersedes an agreement earlier this month to sell Next TV’s Taiwan operations to the chairman of ERA Communications Inc., leaves Next Media with just one of its three businesses on the island and comes amid increasing government pressure on the company’s editorial stance.

According to a statement posted on the Hong Kong Stock Exchange, the company plans to sell Taiwan Apple Daily, Taiwan Sharp Daily, Taiwan Magazine Bundle, and Next TV to Jeffrey Koo Jr., the eldest son of Chinatrust Financial Group’s chairman, for 4.64 billion Hong Kong dollars (US$599 million).

The statement didn’t specify when the deal could be completed, while Cable TV operator ERA Communications Chairman Lien Tai-sheng and Mr. Koo weren’t immediately available for comment.

Next Media is headed by media magnate Jimmy Lai, who has been a long-time combative agitator for press and political freedom in China.

Mr. Lai’s publications frequently provoke Beijing, and his decision to pull out from the island’s print and broadcast media market comes amid warming ties between Taiwan and China.

Next Media made its foray into Taiwan in 2003, when it launched Apple Daily’s Taiwan edition. The publication altered the island’s subdued and conservative media landscape with its provocative reports.

However, Next Media said the Taiwan government has stymied its development since China-friendly President Ma Ying-jeou was voted into office in 2008, with Next TV facing a longer-than-usual regulatory review when it applied for a broadcasting license in 2009. It received a license in 2011 but faced hurdles acquiring a major cable channel.

“The regulatory environment in Taiwan does not suit the way Mr. Lai operates. Basically our future is a digital one and the current block by the [National Communications Commission] has made life [in Taiwan] difficult for us,” said Mark Simon, Mr. Lai’s top aide.

Mr. Lai has a 74% stake in Next Media, and the Taiwan operations represented 43.2% of the company’s total revenue this fiscal year ended March 31, according to company documents.

The company’s Taipei-based animation unit, Next Media Animation, won’t be affected by the deal, said Mr. Simon.

Analysts said the exit of Next Media could further polarize Taiwan’s media environment as the publication is known to take a more neutral stance in its political reporting.

“If the new owner is a smart man, he would keep the paper’s unique characteristics by maintaining an arm’s length distance from any political party, but this is the problem of a conglomerate running a newspaper–often times their foremost concern is not journalism excellence,” said Liu Chang-de, a journalism professor at National Chengchi University.

Chinatrust Group, the parent company of Chinatrust Financial Co. (2891.TW), Taiwan’s largest credit card issuer, owns has six cable television channels via its Videoland Television Network, but doesn’t have print media operations. Chinatrust Financial is one of the most aggressive local lenders to enter the Chinese market, driven by a crowded domestic market.

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